Submission to the Revised Exposure Draft of the Tax Laws Amendment (2012 Measure No 4) Bill 2012: Tax Exempt Body ‘In Australia’ Requirements

This joint submission by the Association of Australian Medical Research Institutes (AAMRI) and Research Australia responds to the revised exposure draft of the Tax Laws Amendment (2012 Measure No 4) Bill 2012, which proposed that organisations with deductible gift recipient (DGR) status operate and pursue their purposes solely in Australia. The submission maintains that this requirement, in proposed section 30-18, is inappropriate for health and medical research, which is inherently international and collaborative. Citing the Organisation for Economic Co-operation and Development (OECD) finding that broader international collaboration produces higher-impact research, and government support for collaboration through the NHMRC and the Forum for European and Australian Science and Technology, it lists routine overseas expenditure such as researcher placements, multinational clinical trials, specialist laboratory analysis and conference attendance. It notes that independent medical research institutes, representing over 8,000 staff and students and $700 million in annual research income, receive over $100 million a year in DGR funds, and that donations cannot practically be quarantined from overseas activity. The submission warns that the ‘minor’ and ‘merely incidental’ qualifications are inadequate and that the restriction would hamper research and deter donations. It proposes amending section 30-80 of the Income Tax Assessment Act 1997 to name nine institutes with significant overseas activity and to create a new endorsement category, with integrity controls, for institutions conducting international research that benefits Australia.